What happens when the oil runs out?
A lot of people in Abu Dhabi hope it won't. And with proven recoverable reserves topping 50 billion barrels, the likelihood is that it will not run out for a long time.
Rather, planners are preparing for the day the market shifts so that oil is no longer widely used to burn in engines. If that day arrives within the next century, chances are that Abu Dhabi - barring any major production increases - would still have sizable reserves of oil.
It is this type of scenario that has helped lead planners and decisionmakers to invest in the diversification of the oil sector, not only to maximize revenues from each barrel produced, but also to ensure that oil resources are put to their best possible use.
And now that the country has built most of the roads, ports, power stations, and so on, that it needs, planners are also emphasizing a need to expand its industrial and manufacturing sector. The goal is to reduce the Emirates' dependence on imports. This heavily government-subsidized sector includes building materials and light manufacturing of consumer items such as paper products.
To assist in the development of a manufacturing sector, the government has established an industrial bank with capital of 500 million dirhams ($136 million) to grant soft loans to local businessmen.
A rapidly increasing resource which officials here are reluctant to discuss is the money the country is accumulating, primarily as a result of Abu Dhabi's oil production. Bankers' rough estimates for total U.A.E. investments abroad range from $20 billion to $40 billion - although observers emphasize there is no way to be sure of the figure. One source estimated foreign investment income will approach $1 billion this year.
As one observer put it: ''They are very discreet.'' The U.A.E. identifies with the developing world and feels flaunting its wealth would place barriers between it and its third-world neighbors.
The discretion is also a result of political pressure, primarily from the US, where Arab investments are sometimes painted as potentially destructive and dangerous.
Officials are very sensitive on this issue, but they point out that they continue to invest in the US because at the moment it is the most lucrative market. They note that the capacity of non-Western markets to absorb large quantities of petrodollars is limited.
U.A.E. investments are notoriously conservative. One official described the investments as the ''Abu Dhabi pension fund.'' U.A.E. investors have avoided buying more than 5 percent of stock in any US firm to avoid having to declare their holdings.
Some observers are looking toward the day when investment income will be sizable enough to play a major role in the economy here. It is a resource that top officials say will become more important in ensuring that the U.A.E. remains a prosperous country, even if the oil market collapses.
Meanwhile, back in the oil fields, the U.A.E., like other Gulf producers, has moved to collect and use more of the gases associated with oil production. The gas was originally flared off because it was expensive to collect and store, but the rocketing energy prices of recent years changed that.
There are three major gas plants in the U.A.E.: Abu Dhabi Gas Liquefaction (Adgas), Abu Dhabi Gas Industries (Gasco), and Dubai Natural Gas Company (Dugas).
Another venture in diversification has been the Dubai Aluminium Company (Dubal), which began operating its $1.4 billion industrial complex of smelter, power plant, and desalination units in 1979. Though the raw materials are imported from Australia, it was believed that the 135,000-ton capacity plant would be profitable, because of the plant's access to cheap fuel - local gas. But world aluminum prices have been cut in half since 1979, and the plant is in the red.
The $200 million Ruwais Fertilizer Industries plant is not expected to begin production until next year. It is to produce 1,000 tons a day of ammonia and 1, 500 tons a day of urea.
Other major petroleum-related industries in the U.A.E. include the country's two refineries, Umm al Nar, with a current capacity of 15,000 bpd, and the Ruwais refinery with a capacity of 120,000 bpd. The refineries are expected to satisfy local needs for refined oil products, and allow some exports.
No one here is questioning the wisdom of developing refineries to turn out locally products which previously had to be imported. But the development of gas-based industries has been debated here for several years. On one side are those who argue it is uneconomical to establish industries dependent on imported raw materials in a country with a small, basically uneducated indigenous population. They say such industries will only exacerbate the already critical expatriate-labor problem.
These critics say it would be better to establish industries in heavily populated countries, such as nearby India and Pakistan, where labor is cheap and the employer does not have to import and house workers. They also argue that industries using raw materials should be developed where those materials are more readily available.
On the other side of the debate are those who say that any form of import substitution is worth striving for. They note that some products, such as food, are strategically important to the Emirates. In addition, they say that investment and development can be directed toward capital- rather than labor-intensive industries.